Fake CLAWD AI Token Scams Up Before Crashing Down

Add another crypto rugpull to this month’s list. Memecoin CLAWD was used by cryptoscammers after hijacking the name to AI assistant Clawdbot, which has now rebranded to Moltbot after ensueing confusion and controversy. 

What Happened with Memecoin Token CLAWD? 

CLAWD was named after the open source AI assistant formerly known as Clawdbot (now Moltbot), which is based on ClaudeAI, letting users run their assistant locally on their own hardware. The Solana-based token deployed on memecoin centric platforms this past Sunday, hitting a market cap of $16 million, per Yahoo Finance. 

Founder of the AI assistant, Peter Steinberger, vehemently and publicly denied any association with the token and shot down any plans to release one in the future. He revealed earlier that the Clawdbot name was stolen by accounts run by “crypto shills” during a rename to resolve trademark issues, leading to him changing the AI’s name to Moltbot. The accounts used the Clawdbot name to promote their token while impersonating themselves as legitimate owners.  

As a result, the market cap sharply fell to $8 million, and then under $800,000. Now some crypto trading platforms have already begun to remove it from their sites. 

Why Scammers Chose CLAWD

Steinberger’s project was initially generating hype in AI circles. Based on Claude, it was meant to not just talk to you, but integrate in your daily workflow and software to execute tasks, running locally while giving users full control. At almost 85 thousand stars and counting on GitHub (now under Moltbot), AI enthusiasts and tech savants have praised the assistant for how it has helped their day to day work. It even generated interest in the stock market, as Cloudflare's infrastructure for the assistant led to company shares going up by 14% on Tuesday. 

With news and interest surrounding the product, it makes sense why scammers chose to hijack it; the name was popular enough to generate interest in their own unrelated token. 

How did Crypto Scammers get Control of CLAWD? 

Anthropic PBC, the company that owns Claude, raised trademark issues with the original Clawdbot name, and requested that Steinberger change the name of his project. But the transition didn’t go smoothly. Steinberger says that crypto scammers squatted his GitHub and X accounts, where they became outlets for promoting their memecoin, CLAWD. Unfortunately, the AI program itself is claimed to have active security issues, according to some analysts and users. Brave’s X account noted that, despite the immense usefulness of the assistant, “always on” capabilities can pose risks to users, while suggesting to use a separate computer and separate accounts with approvals. 

Nonetheless, the developer had to reach out to GitHub to resolve the issue and claim his account back. 

How did the CLAWD Token Crash? 

Despite some crypto enthusiasts encouraging him to claim deployment fees, Steinberger remains firm in distancing himself from the CLAWD Token. In an interview with BeInCrypto, he stated “It makes zero sense to have a coin for this. I am not throwing my reputation away for a quick buck”. His rebrand to Moltbot has helped cement his intentions to leave this situation in the rearview mirror and establish his AI project as a serious commitment. 

Crypto news saw the beginning stages as people began to put money into the memecoin. Initially, the early market cap for $CLAWD rose to 16 million dollars. Then crypto users noted anonymous deployers and wallets starting to liquidate, raising concerns of rug pulls, a typical crypto scam using memecoins. After the rebrand and statements, the market cap of $CLAWD token faced a crypto crash to 8 million dollars, then further down to just under 800 thousand. 

The pressure from the crypto crowd on X is loud, even in the aftermath, but some remain supportive of his decision to sever ties, saying that the situation has raised awareness of domain and ownership security. His distancing from the token shows just how pervasive memecoin culture has become in Web3 culture. While the project began and remains as open-source, the trade off is potential security issues for users, and its founder, it seems. 

What Does the CLAWD Scam Mean for Crypto?

Web3 is both promising and dangerous territory. Of course, anything AI and crypto related is going to raise headlines, especially when put together. The issue is that many don’t understand what both can and cannot do, leading to speculative investments that can be misguided. The larger issue is that these situations can illegitimate crypto and hurt public perception, leading many to think the crypto industry is little more than a market place for scammers to scam each other in a race to the bottom. The ongoing marketwide crypto crash only compounds the reservations people have about digital assets, even if this was just a memecoin scam, and not part of broader geopolitical and macroeconomic events. 

Any industry is going to have its fair share of bad actors, unfortunately, and crypto is no different. On the other hand, the responses respecting Steinberger’s decisions show that there are users who take safety and responsibility seriously as regular practice. This scam only illustrates how users and traders need to be aware of where and what they invest in.